RASHTRIYA MILL MAZDOOR SANGH versus THE STATE OF MAHARASHTRA AND ORS.

Citation: [1996] SUPP. 5 S.C.R. 458 · Decided: 03-09-1996 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
RASHTRIYA MILL lv1AZDOOR SANGH 
v. 
THE STATE OF MAHARASHTRA AND ORS. 
SEPTEMBER 3, 1996 
[J.S. VERMA AND B.N. KIRPAL, JJ.) 
Constitution of India, 1950 : A1ticles 14, 19 and 21--<:onstitutional 
validity of Sectio11s 9(2), 10(2), 12 (1) and 26 of the Central India Spinni11g, 
Weaving and Manuf actwing Compa11y Limited, the Empress Mills, Nagpur 
C 
(Acquisitio11 and transfer of U11de1taking) Act, 1986-Natio11alisatio11-Ac-
quisitio11 of Undenaking for giving effect to the policy of the State towards 
secwi11g the directive p1i11ciple~Acquisition of Unde1taki11g to subse1ve the 
interest of general public-Retention of more than fifty per cent of employees 
i11 se1vice-Violation of A1ticles 14, 19, 21 a11d retrenchn;ent alleged-Held, 
D the requisite nexus of the Act with A1ticle 39 (b) clearly established and the 
Act immu11e to challenge on any ground based 011 A1ticle 14 or 19 by viltue 
ofA1ticle 31C-Acquisition of the Unde1taking is not a case of retrenchme11t 
and not violative of A1ticle 21. 
Administrative La~Judicial revie~Held, Judicial review 11ot ex-
E eluded to exami11e the ne.\1ts betwee11 the impug11ed Act a11d Directive Pri11-
ciples. 
The Empress Mills; Nagpur, a Textile Undertakings has Been 
nationalised by the Central India Spinning, Weaving and Manufacturing 
Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer 
F 
of Undertaking) Act, 1986. The Constitutional validity of Sections 9(2), 
10(2), 12(1) and 26 of the Act was questioned in a writ petition filed by the 
appellant claiming to be a representative Union of the workmen employed 
in the Empress Mills on the ground that these provisions violate Articles 
14, 19 (1) (c) and 21 of the Constitution. The High Court has rejected the 
G said writ petition. Hence, this appeal. 
Dismissing the appeal, this Court 
HELD : 1. Judicial review is not excluded to examine the nexus 
between the impugned law and Article 39. The permissible judicial scrutiny 
H 
to this exient reveals that the enactment undoubtedly is for effecting the 
458 
RASHIRIYAMILLMAZDOORSANGHv. STATE(J.S. VERMA,J.) 
459 
directive principle in clause (b) of Article 39 towards securing that owner-
A 
ship and control of the undertaking are so utilised as best to sub-serve the 
common good. [463-C-D] 
Tinsukia Electric Supply Co. Ltd. v. State of Assam & Ors., [1989) 3 
sec 709, relied on. 
2. There can not be any doubt that the requisite nexus of the Act with 
Article 39(b) is clear and duly established. This being so, the Act is immune 
to challenge on any ground based on Article 14 or Article 19, by virtue of 
Article 31C. [463-F] 
B 
3. The alternative to nationalisation of this industry in the manner it C 
is done by this Act is liquidation and unemployment of all the employees of 
the undertaking. The Act ensures continuance of the undertaking as a 
productive unit and continuation in employment of as many as possible. 
[463-E] 
4. It is not a case, in effect, of retrenchment. Such an argument is, D 
therefore, based on a misappreciation of the effect of the enactment. 
Moreover, the unemployment of those who could not be continued in 
service is not because of the act of nationalisation since unemployment of 
all employees was the logical consequence otherwise. The act of 
nationalisation in this manner saves majority of the employees from E 
unemployment. The argument based on Article 21 is misplaced. [464-D-E] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11 (NL) 
of 1989. 
From the Judgment and Order dated 5.8.87 of the Bombay High F 
Court in W.P. No. 249 of 1987. 
S.K. Dholakia S.D. Thakur, Ms. Chandan Ramamurthi M.A Krishna 
Moorthy, S.M. Jadhav (D.M. Nargolkar), (NP), T.V.S. Narasimhachari, 
R.B. Puranik and Nikhil Nayyar for the appearing parties. 
The Judgment of the Court was delivered by 
J.S. VERMA, J. This appeal by special leave is against the judgment 
of the Bombay High Court dismissing a writ petition filed by the appellant 
G 
to challenge the validity of Sections 9(2), 10(2), 12(1), and 26 of the Central 
India Spinning, Weaving and Manufacturing Company Limited, the H 
460 
SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R. 
A Empress Mills, Nagpur (Acquisition and Transfer of Undertaking) Act, 
1986 (Maharashtra Act No. XLVE of 1986). 
B 
The Empress Mills, Nagpur, a textile undertaking, has been 
nationalised by the Central India Spinning, Weaving and Manufacturing 
Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer 
of Un
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